Tuesday, 28 February 2012

The Xue Long (Snow Dragon), a Chinese icebreaker that leads research into the rapidly opening Arctic shipping routes

by Ajai Shukla

Business Standard, 28th Feb 12

One morning in 1999, the tiny Canadian village of Tuktoyaktuk on the Arctic Ocean awoke to a surprise. Parked off the coast was a Chinese icebreaker ship, the Xue Long, mocking Ottawa’s pretensions of control over its northern waters. China is not even amongst the eight Arctic countries --- Russia; Finland, Sweden, Norway, the US (Alaska); Iceland, Denmark (Greenland) and Canada itself --- that claim the Arctic’s fabled hydrocarbon reserves, and the rapidly opening Arctic shipping lanes. But Beijing knows that global warming is melting the Arctic ice cap; and it is readying to exploit this, both commercially and militarily.

This growing capability threatens Indian strategy in a war with China. Defence analysts point to India's two-fold strategy: defending the land border in the north with the army and the air force; while using the Indian Navy to block China’s commercial and military shipping in the Indian Ocean. India’s coastal airfields, especially in the Andaman and Nicobar Islands, and its proximity to the choke points of Malacca and Sunda in southeast Asia and the Straits of Hormuz and Aden in West Asia will allow the Indian Navy to impose a strangling economic blockade on China.

But this is not possible if Chinese shipping transits through the Arctic routes, which bypass the Indian Ocean. Today, at an international maritime seminar in New Delhi, Defence Minister AK Antony expressed concern, saying: “The possible melting of the polar ice caps will have tectonic consequences for our understanding of what maritime domains constitute ‘navigable’ oceans of the world. Specific to Asia and the Indian Ocean Region, there may be a need to reassess concepts like chokepoints and critical sea lines of communication (SLOCs).”

Global warming has created the new SLOCs that Antony refers to. Arctic winter temperatures have risen by more than seven degrees over the last six decades. The resulting thinner ice melts easily during summer. In the unusually warm summer of 2007 the Arctic ice cap shrunk by a million square miles. Advanced scientific models presented at the American Geophysical Union in 2007 anticipated an ice-free Arctic summer by 2013.

The melting ice is opening two Arctic sea routes: the Northwest Passage connects the Northern Atlantic, through Canada’s northern islands, with the Northern Pacific Ocean. In Sept 08, the MV Camilla Desgagnes became the first commercial ship to traverse the Northwest Passage, with the crew reporting that it “did not see one cube of ice.” More relevant to China is the Northern Sea Route, which connects the North Atlantic, passing north of Russia, to the North Pacific and then to the South China Sea. This not just bypasses any Indian ambushes in the Indian Ocean but also reduces the distance from northern Europe to Japan by over 40%, from 21,000 kilometres to just 12,000 kilometres.

In a Financial Times article in January 2008, Professor Robert Wade of the London School of Economics revealed that China “has lately displayed special interest in relations with Iceland, the tiny island in the north Atlantic, which with its strategic location is believed to get a key role in future shipping in the region. China wants to start shipping containers in the north, and sees the deep-sea ports of Iceland as potential port bases.”

China is harnessing a global maritime trend. Just as trans-polar routes revolutionized air travel, the melting of Arctic ice caps is revolutionizing commercial shipping. Shipping companies worldwide have already built close to 500 ice-class ships and more are on order.

But China also recognizes the strategic and military advantage of an alternative route for its commercial shipping. Beijing has set up the Chinese Arctic and Antarctic Administration, to oversee polar research and expeditions. This maintains an outpost, the Yellow River Station, in Norway’s Spitsbergen Archipelago. It bought the Xue Long, just as it bought its first aircraft carrier, the Varyag, from Ukraine and then spent 31 million Yuan ($5 million) to make it polar-capable. The Xue Long has made four major research trips into the Arctic, the most recent one last year.

With competing claims and counter-claims over waters, the Arctic is seeing a growing military presence. Scott Borgerson revealed in Foreign Affairs magazine that, after the UN rejected Russia’s claim to almost half a million square miles of Arctic waters, “the Kremlin dispatched a nuclear-powered ice-breaker and two submarines to plant its flag on the North Pole’s sea floor. Days later the Russians provocatively ordered strategic bomber flights over the Arctic Ocean for the first time since the Cold War.”

Sunday, 26 February 2012

The Naval LCA at its Oscars-like rollout last July. It is likely to fly next month and the navy has ordered 8 Limited Series Production fighters

By Ajai ShuklaBusiness Standard, 27th Feb 12

The Indian Navy has signalled strong support to the naval version of the Tejas Light Combat Aircraft (LCA), even before the indigenous fighter makes its first flight next month. In New Delhi, on Wednesday, the defence ministry’s apex Defence Acquisition Council (DAC) sanctioned the building of 8 Naval LCA aircraft by Hindustan Aeronautics Limited (HAL).

“The 8 fighters will be a mix of single-seat fighters and twin-seat trainers. The money for these has also been allocated,” says a senior MoD official who was at the DAC meeting.

The Rs 3,650 crore Naval LCA programme was sanctioned in March 2003. Two prototypes are almost complete, the first a twin-seat trainer and the second a single-seat fighter. The 8 fighters sanctioned on Wednesday are “Limited Series Production” or LSP fighters. These will be used for flight-testing, a painstaking process that could last two years or more. Once flight-testing is completed, HAL will establish a full-scale production line.

The Naval LCA is a crucial cog in the navy’s expansion and, therefore, in India’s increasingly visible maritime strategy. It is designed to fly from an aircraft carrier, a floating airfield that can project Indian power across the oceans. India has already bought Russian MiG-29K medium fighters to equip the INS Vikramaditya (formerly the Gorshkov) an aircraft carrier acquired from Russia. But another two (and possibly three) indigenous Vikrant-class aircraft carriers being built at Cochin Shipyard Ltd will field the Naval LCA, along with a medium fighter.

With the first of these, INS Vikrant, at an advanced stage of construction in Kochi, the navy is keen that development of the Naval LCA proceeds alongside. Earlier this month, the normally soft-spoken navy chief, Admiral Nirmal Verma, publicly criticised the Aeronautical Development Agency (ADA oversees the LCA programme) for placing the Naval LCA programme on the back burner, while focusing on the air force version of the Tejas.

The admiral’s words have goaded HAL into action. Business Standard has been told that the Naval LCA will take to the air in March, a landmark event for the navy.

“The Naval LCA will definitely fly in March. We are doing ground runs and starting low-speed taxi trials, in which the fighter rolls on the runway under its own power. Then we will do some high-speed taxi trials, in which the fighter will accelerate to take-off speed; but when its nose lifts off the ground, we will slow down without actually taking off. Only after that will the first flight actually take place,” says PV Deshmukh, HAL’s officiating CMD.

The Rs 10,397 crore air force Tejas project has obtained initial operational clearance (IOC), and will soon join the IAF’s fleet. But the Naval Tejas presents additional design challenges, such as being able to take off from an aircraft carrier’s ski-jump after accelerating for just 200 metres. Even more challenging are repeated carrier deck landings, in which a hook on the aircraft snags on an “arrestor cable” on the deck, forcing the aircraft to a standstill in just 90 metres. These landings, in which the fighter slams into the carrier deck at more than 7 metres per second, are often described as “controlled crashes.”

The navy and ADA will extensively test the Naval LCA on land before venturing onto an aircraft carrier at sea. A Shore-Based Test Facility (SBTF) has been created in Goa, which replicates the dimensions and conditions of a carrier deck, including the arrestor and gear that brings the aircraft to a quick halt; and the optical landing system that allows the pilot to “aim” his fighter at the arrestor wire spread out on the carrier deck. After extensive SBTF testing, the Naval LCA will face the crucial challenge of landing and taking off from an actual aircraft carrier.

The navy’s two prototypes and eight LSP fighters will be powered by General Electric GE F-404 engines. Meanwhile, ADA has selected the more advanced and powerful GE F-414 engine for the LCA Mark II. This engine will also power future Naval LCAs. With 15% more thrust, the GE F-414 will be useful in taking off from an aircraft carrier deck.

Saturday, 25 February 2012

Who should handle offsets? The Acquisitions Wing, or the Department of Defence Production? That dispute is holding held up the new offset policy

(Pictured here: the DRDO's Kaveri jet engine)

By Ajai ShuklaBusiness Standard, 25th Feb 12

A slew of amendments to the Defence Offset Policy are held up by disagreement within the defence ministry on a single crucial issue: which MoD department should handle offsets. A meeting of the apex Defence Acquisition Council (DAC) in New Delhi on Wednesday agreed on letting vendors offer high technology as an offset; on using “multipliers” for directing offsets into priority areas; and on allowing vendors to “bank” offsets for longer periods. But without consensus on which department should be the “single window” for offsets, the new offsets policy is on temporary hold.

“Over the last six months, proposed amendments to the offsets policy have been discussed threadbare in the Offset Committee, headed by Vivek Rae, the Director General of Acquisitions. All that remains to be decided is who should handle offsets. The Offsets Committee will discuss this further and the matter should be cleared in the next DAC meeting next month,” says a senior MoD official anonymously.

The disagreement centres on whether the Acquisitions Wing should handle offsets, or the Department of Defence Production (DDP). The DG Acquisitions spends the military’s capital budget, purchasing defence equipment worth tens of thousands of crore annually. Any overseas purchase worth over Rs 300 crore makes the vendor liable for offsets worth 30% of the contract amount.

The DDP, too, is directly connected with offsets. The government’s Allocation of Business Rules makes the department responsible for developing indigenous defence products and for the domestic defence industry. This is also the stated aim of offsets.

Currently, the Acquisitions Wing and the DDP’s Defence Offsets Facilitation Agency (DOFA) both play roles in implementing offsets. The new policy aims at combining these roles into a single office. This has been a long-standing demand from global arms vendors.

According to the Defence Procurement Procedure of 2011 (DPP-2011), the Acquisitions Wing receives and examines the technical and commercial offset offers from vendors; finalises and signs the offset contract; and monitors the implementation of offsets through an Offset Monitoring Cell. DOFA’s, role is more nebulous: it assists the Acquisition Wing in the technical evaluation of offset proposals; assists foreign vendors in interacting with Indian industry; certifies which Indian R&D agencies can receive offset investments; and advises and assists in implementing the offset policy.

The MoD’s decision, therefore, is where to set up the “single window”. One section of the ministry favours the Acquisitions Wing; another argues for the DDP.

“There is a clear conflict of interest in allowing the Acquisitions Wing a predominant role in offsets. Its primary role is to buy defence equipment expeditiously; and it regards offsets as an additional hurdle in an already cumbersome procurement process. The Acquisitions Wing has neither the competence, nor mind space to handle offsets,” says Major General (Retired) Mrinal Suman, an expert on Indian defence procurement.

Both sides, however, agree that a “single-window’ agency would require the contracting authority to also monitor the discharge of the contract. Indian defence manufacturers and experts like General Suman favour a strengthened DOFA that handles all the offset-related aspects of procurement: receiving and evaluating vendors’ offset proposals; facilitating offset partnerships; signing the offset contracts; and, crucially, monitoring how vendors discharge their offset liabilities.

Offsets, which were first introduced in the Defence Procurement Policies of 2005 and 2006 (DPP-2005 and 2006), required foreign vendors who were awarded defence contracts worth Rs 300 crore or more to plough back at least 30% of the contract value into Indian defence production or R&D. Amendments in DPP-2008 permitted offsets in non-licensed defence fields. And DPP-2011 also permitted vendors to discharge offsets in the non-defence fields of civil aviation and homeland security.

Thursday, 23 February 2012

The Defence Ministry will today finalise long-awaited amendments to the defence offset policy. The key steps that the apex Defence Acquisition Council (DAC) is likely to okay: permitting vendors to offer technology as offsets; allowing offsets to be discharged in commercial shipbuilding; and allowing “offset multipliers” in order to canalize offsets into desired fields. Crucially, the DAC is likely to mandate that the Defence Offset Facilitation Agency (DOFA) would be responsible for administering offsets, a decision that would permit the expansion and empowerment of this currently moribund department.

Offsets, which were first introduced in the Defence Procurement Policies of 2005 and 2006 (DPP-2005 and 2006), required foreign vendors who were awarded defence contracts worth Rs 300 crore or more to plough back at least 30% of the contract value into Indian defence production or R&D. But global vendors, particularly US companies, have lobbied hard to dilute this policy, insisting that the Indian defence industry does not have the capacity to absorb the Rs 40,000 to 50,000 crores worth of offsets that could arise over the next five years. The policy that is likely to be finalised today will fulfil many of the vendors’ demands.

High-level MoD sources say that the DAC could okay the following measures:

• Permitting technology transfer as an offset. This will only apply to high technology that a vendor provides with full Intellectual Property Rights (IPR), and without restrictions. The DRDO will evaluate technology that is offered as an offset, assessing whether it fits into an overall indigenization plan. For example, if a vendor offers technology for a missile seeker head, the DRDO will assess how badly that is needed; the feasibility of developing the technology within India quickly; and the cost at which it is offered.

• A system of “multipliers” will be introduced, which would give vendors enhanced credits for investing in priority fields. For example, if the MoD urgently requires metallurgical technology for building jet engines, a multiplier of, say, 3 could be placed on that technology. That would give a vendor who provides technology worth Rs 200 crore an offset credit of Rs 600 crore.

• Likely to be approved: a multiplier of 1.5 for purchase/manufacture directly related to the contract that generates the offset obligation. Also likely is a multiplier of 1.5 for investment in small and medium enterprises (SMEs). The highest multiplier of 3 is likely for the provision of high technology.

• DOFA, the lightweight section under the Department of Defence Production (DDP), could be beefed up with additional manpower and resources into a “single window agency” that can provide vendors with all reviews and approvals. Alternatively, DOFA could take the form of an entirely new agency, called “Directorate of Defence Offset Management” or “Defence Offset Management Wing.”

• Vendors could be permitted to discharge offsets through commercial shipbuilding. This non-defence field will be in addition to civil aviation and homeland security, which were permitted as offsets in DPP-2011

• The requirement of offsets may be substantially increased above 30%, since vendors would benefit from measures like multipliers (a multiplier of 3 effectively brings down a 30% liability to just 10%). It will also be compulsory for vendors to discharge at least 40% of their offset requirement through defence production (i.e. direct offsets) and no more than 60% through the non-defence categories of civil aviation, homeland security and shipbuilding.

• The eligibility period for “offset banking”, which allows vendors to accumulate offset credits towards a future contract, could be increased to 7-10 years.

DPP-2006 permitted only direct offsets, i.e. offsets in products that required a defence licence. This was diluted in DPP-2008, which allowed offsets in non-licensed defence fields. Vendors began discharging offsets through low-tech, quasi-military products like field shelters and air-conditioning. DPP-2011 diluted the requirements further, permitting vendors to discharge offsets in the non-defence fields of civil aviation and homeland security. The latest policy will represent the third wave of offset dilution.

Tuesday, 21 February 2012

The defence ministry's Department of Ex-Servicemen's Welfare (DESW) has emerged as a major hurdle in taking care of the welfare of retired soldiers

by Ajai Shukla

Business Standard, 21st Feb 12

In the 1965 conflict with Pakistan, Vijay Oberoi, a young army captain from the Maratha Light Infantry, was shot through the thigh in a gunfight with Pakistani raiders in Kashmir. Bleeding profusely from a severed artery, Oberoi was brought to hospital; his life was saved but his leg amputated. In 2001, Lieutenant General Vijay Oberoi retired as vice-chief of army staff, having soldiered on for 36 years with an artificial leg. He did not receive a paisa extra in ser vice, and the ministry of defence (MoD) challenged his disability pension in the Supreme Court last Friday.

When General Oberoi was released from service, a medical board categorised him as 70 per cent war-disabled, entitling him to a modest pension benefit. But when the Fifth Pay Commission enhanced this to 75 per cent, that is, an increase of five per cent, the MoD flatly refused to pay. The officer approached the Armed Forces Tribunal (the AFT is the apex departmental court for military cases), which in 2010 directed the MoD to pay the enhanced rate. No way, muttered the MoD! Let’s drag on the case.

Ironically, this appeal was filed by the MoD’s Department of Ex-Servicemen Welfare (or DESW, headed by secretary, ESW). Far from safeguarding the welfare of retired soldiers, sailors and airmen, many of them disabled from battle injuries or the bleak conditions of service, the DESW views its mandate as stonewalling, effectively holding off payment until an ex-serviceman claimant is either dead or broke. Examination reveals the payment of lakhs of taxpayer rupees to pricey lawyers, including the solicitor general, to stonewall the payment of tiny sums to genuinely entitled ex-servicemen. This strategy often brings the DESW uncontested “victory”, since most retired veterans cannot afford the cost of litigation in the Supreme Court.

It has also brought the DESW the moniker of Department of Eternal StoneWalling.

It is not difficult to see why the Supreme Court has backed General Oberoi on the first hearing, rejecting the DESW’s plea for a stay. The Fifth Pay Commission, in order to curtail medical subjectivity in computing disability percentages and to simplify and rationalise disability pensions, introduced the concept of “broad-banding”. All soldiers with up to 50 per cent disability would be paid 50 per cent disability pension; those between 50 and 75 per cent would be paid 75 per cent; and soldiers with 76 per cent or more disability would be regarded as 100 per cent disabled. Instead of welcoming the simplified arrangement, the MoD perversely restricted “broad-banding” only to soldiers who were prematurely invalided out of service, while withholding benefits from those who completed their service. The AFT swiftly rejected this discrimination, as did the Supreme Court in two rulings last year: K J S Buttar versus Union Of India and Union of India versus Paramjit Singh. But the DESW chose to waste the Supreme Court’s time anyway.

With generals treated thus, there is far less welfare for lower ranks. Take the case of “havildars” (sergeants, or three-stripers, the backbone of the army) who are sometimes rewarded with the honorary rank of “naib subedar” on retirement. The Sixth Pay Commission ruled that honorary naib subedars should get the pension for that rank, rather than havildars’ pension, which was the earlier practice. The DESW, however, only implemented it for post-2006 retirees. The AFT, however, extended this benefit to pre-2006 honorary naib subedars, a judgment that the Supreme Court concurred with. Against army advice, the DESW appealed to the Supreme Court. Appearing in the case, the solicitor general, briefed by the DESW, told the court (and this was included in the judgment) that the benefit was only for havildars who obtained honorary rank prior to retirement. In fact, as the DESW knows well, honorary naib subedar rank is only awarded after retirement. The Army headquarter’s plea that this be rectified has been ignored. To this day, honorary naib subedars remain tricked out of their pension by the DESW. What has been achieved except a further erosion of the MoD’s relationship with the military?

Such skullduggery naturally generates litigation; and the DESW is overwhelmed by the work that it creates for itself. Ninety per cent of all court/tribunal judgments that require implementation (and that is only because the DESW has exhausted every conceivable legal recourse) remain pending until the aggrieved ex-serviceman files a contempt or execution petition. This adds to the already groaning table of litigation.

The military has tried fruitlessly to reduce litigation by simplifying policy and by avoiding automatic appeals against adverse judgments. But the DESW has hardly helped. Replies to Right to Information petitions highlight multiple issues that the DESW has not resolved even after the secretary, ESW, has approved the military’s recommendations. Rudderless and besieged, the department tells lies even to Parliament.

The DESW flatly lied to the Rajya Sabha’s Committee on Petitions last December (see its 142nd report) on the issue of enhanced pensions, falsely stating that it was difficult to process the case for One Rank, One Pension (OROP) since defence pensioners’ documents are destroyed after 25 years. This is untrue; para 595 of the Regulations for the Army mandates the destruction of records after 25 years for non-pensioners only. But no action has been taken against the DESW officer who is responsible for lying to a parliamentary committee.

The DESW also lied to the parliamentary standing committee of the 15th Lok Sabha, understating the number of court/tribunal judgments that had not been implemented. It put the figure at 303, blaming the military. In fact, more than 2,500 judgments await implementation.

With MoD-military relations bruised by the conflict over the army chief’s age, Defence Minister Antony would put some balm on the wounds by examining the workings of the DESW.

Friday, 10 February 2012

Long after the streets emptied that chilly winter evening in December 1981, lights were burning on the 5th Floor of Vayu Bhavan (Hindi for “Air Building”) in the elite Operations Branch of the Indian Air Force. Worrying the IAF’s brightest thinkers was a brash new arrival in the sub-continental skies. The United States had just announced the sale of forty F-16 fighters to Pakistan, giving the Pakistan Fiza’ya (as the Pakistan Air Force styles itself) a fighter potent, fast and agile enough to upset the air power balance in the subcontinent. That F-16 purchase unleashed a set of Indian reactions that culminated in last week’s decision to negotiate with French company, Dassault Aviation for 126 Rafale medium multi-role combat aircraft, the MMRCA contract for short.

India moved quickly to counter the F-16 with Mirage 2000 and MiG-29 fighters. Soon after Squadron Leader Shahid Javed landed Pakistan’s first F-16 at Sargodha Air Base on 15th Jan 1983, New Delhi signed a contract with Dassault for 49 Mirage 2000s. IAF pilots began training in France and, in 1985, the first Mirage 2000s joined the IAF fleet. This was South Asia’s first true “multi-role” fighter, good for strike missions, electronic warfare support, and also fast and manoeuvrable enough for air-to-air combat. From the outset, IAF pilots relished the Mirage 2000 as well as the relationship with Dassault.

Rajan Bhasin, then a young flight lieutenant and later one of the IAF’s top guns, was in the first batch of eight IAF pilots who went to France in 1984 to learn how to fly the Mirage 2000. He recalls, “The Mirage 2000 was a superb fighter. And the relationship with Dassault was always completely professional. We got the fighter we paid for; and we got the training we paid for. Whenever we wanted extra, we had to pay for it. But Dassault did not cheat.”

By 1987 the PAF had inducted all forty F-16s that it had contracted for and, in 1988, Pakistan ordered and paid for another 11 F-16 fighters. But though alarm bells were ringing in New Delhi and the IAF was keen to order more Mirage 2000s under an options clause in the contract, it did not do so. The purchase of the Russian MiG-29, reputedly an “F-16 buster” due to its prowess in air-to-air combat, had left no space for more Mirage 2000s.

But the IAF’s enthusiasm for Dassault fighters still burned bright, especially after the Mirage 2000 demonstrated its ability to strike almost invisible Pakistani positions on the knife-edged ridges above Kargil in 1999. At the turn of the century --- with the early model MiG-21s rapidly becoming obsolete; and with their replacement, the indigenous Tejas Light Combat Aircraft still to take to the air (it first flew only in 2001) --- the IAF formally asked the MoD to buy and shift to India the entire Mirage 2000 production line that Dassault was closing down. This would allow Hindustan Aeronautics Limited (HAL) to build the improved Mirage 2000-5 fighter to replace the vintage MiG-21s. And with Dassault shifting production to the new-generation Rafale fighter, France was willing and eager to sell India the Mirage 2000 line.

“The IAF told the MoD that we wanted aircraft with which we were familiar. That was the Mirage 2000 and we wanted the latest version: the Mirage 2000-5. As an air force we were very familiar and comfortable with the operational and tactical handling of the Mirage 2000,” says Air Marshal (Retired) Pranab Kumar Barbora, who was Vice Chief of Air Staff till 2010.

But the MoD, stinging from the Tehelka exposes on corruption in defence procurement, feared that a single-vendor buy from Dassault might be criticised as arbitrary. Pointing out that the IAF had not availed of an “options clause” in the 1983 contract for Mirage 2000 fighters, George Fernandes’ defence ministry asked the IAF to float a global tender for the very best fighter that could be bought from the international market.

Another reason for a new global tender was the fear that the Mirage 2000-5 might no longer be good enough. With the US dependency on Pakistan growing due to its presence in Afghanistan, it seemed likely that at least two more squadrons of F-16s would soon join the PAF. These would be the formidable Block 50/52 fighters with greatly improved radars and weaponry. And the PAF was also slated to get a brand new fleet of over 200 Chinese JF 17 Thunder light fighters.

Even more alarming was China’s weapons and infrastructure build-up in Tibet. The old J-7 and J-8 fighters, which the IAF could comfortably handle, were now being replaced by a fleet of Russian Sukhoi-27/30 fighters, and the Chinese F-10, which reportedly fields advanced avionics bought from Israel. Suddenly the dragon was peering over the Himalayas, its Lanzhou and Chengdu Military Regions that border India incorporating 5-7 divisions of the People’s Liberation Army and an improved military airfield network in Tibet with extended runways and modernised facilities. China was now a formidable aerospace power.

“We needed to boost our fighter fleet really, really, urgently,” says a serving air marshal who prefers to remain anonymous. “And we were determined to implement an acquisition process which nobody in the MoD could fault or delay. Today, the IAF process has become the gold standard for fighter aircraft acquisitions worldwide. The Brazilian defence minister, who visited Delhi this week, has asked us to share details with his ministry on just how we did it.”

* * * *

It began with the drawing up of specifications in Vayu Bhavan that demanded not the best available fighter in the world, but a fighter so good that it didn’t yet exist. The IAF specifications included: superb aerodynamic performance; the most advanced AESA (active electronically scanned array) radar that would allow the MMRCA to detect and fire missiles before an enemy fighter realised that he was in the crosshairs; advanced electronic warfare (EW) capabilities to blind the opposition; and weaponry that was integrated seamlessly into the fighter’s avionics. Everything was put down in writing before a Request for Proposal (RfP) was sent out to six global aerospace companies in August 2007.

For these companies, the big question was: which fighter to offer? Lockheed Martin had the F-22 Raptor, the world’s only 5th generation fighter, which would win any competition hands-down, but would never be cleared for export. The company was also building the F-35 Lightening II Joint Strike Fighter, but that was years away from completion and could not participate in the IAF’s impending flight trials. Lockheed Martin eventually fielded its most advanced Block 60 F-16 fighter, dubbed the F-16IN Super Viper, with better avionics and weaponry than any F-16 sold before. Other companies had fewer choices; Boeing fielded its F/A-18 Super Hornet; Dassault offered the Rafale; Saab, the Gripen NG which is still in the future; Eurofighter GmbH offered the Typhoon; and Russia fielded the MiG-35.

In the second half of 2008, the IAF conducted a technical evaluating of these bids, to see whether the bids conformed to the RfP. What should have been an innocuous process turned dramatic when Dassault’s bid was reportedly rejected as incomplete. While this was quickly resolved by diplomatic intervention, reportedly by President Sarkozy himself, other companies are now saying that the Rafale was done a favour by being allowed back into the contest.

It was the next stage of evaluation --- flight trials --- that has established the IAF’s testing process in a league of its own. Conducted by the Directorate of Air Staff Requirements (ASR), and overseen by the quiet and unflappable Air Commodore (now Air Vice Marshal) RK Dhir, each of the six contenders were flight tested by IAF pilots who tested 660 separate performance aspects of each contender aircraft. For example, the RfP demanded that the fighter’s engine should be replaced within one hour. The maintenance teams actually made each contender do that. If the IAF demanded a “sustained turn rate” (the quickness with which a fighter can turn around in the air) of 24 degrees per second, each fighter was physically put through this manoeuvre to establish that it met this requirement. (Incidentally, both the American fighters failed to meet the IAF’s “sustained turn rate” requirements)

Air Marshal Barbora, who oversaw the flight evaluation process as the IAF vice chief, recounts how six teams of IAF pilots, flight engineers and maintenance staff were mustered, one for each fighter that was trial evaluated. Each pilot began by learning to fly the fighter he would evaluate, while the flight engineers and maintenance staff learned the technical ropes. The IAF pilots physically flew each of the contending fighters, albeit with a “home” pilot in the second seat. This was the first time that any air force has been allowed to conduct such a fly-off.

Last April, the MoD “down-selected” the Rafale and the Typhoon, which meant that these two fighters alone had passed the flight trial evaluation. Now the game had changed; with performance established, the cheaper of the two was going to be adjudged the winner. For the first time in India, costs were not compared on the ticker price alone, but on how much the fighter would cost to buy, build, upgrade and operate over a service life of 3-4 decades. The IAF had clearly learned a lesson from the Russian MiG experience, where a cheap upfront price that seemed initially attractive led to enormous operating costs and a lower aircraft availability that meant that when the IAF paid for six squadrons, it actually had just three squadrons to fly.

Says Air Marshal (Retired) Padamjit Singh Ahluwalia, who brought in the first Mirage 2000s to India, says, “Russian fighters like the MiG-29 are great for air shows but serviceability is often a problem. When you get airborne, the radar often becomes unserviceable… sometimes this happens between two sorties. The result is very low serviceability rates.”

* * * *

The final countdown has begun towards signing a contract with Dassault Aviation. An MoD body called the Contract Negotiating Committee (CNC) will now engage Dassault in beating down its price, grilling Dassault’s negotiators on the calculations that determined the final price of the Rafale, scanning the costs of labour and materials that go into the fighter. For example, the CNC will find out how much titanium goes into each aircraft and then check titanium prices on the London Metal Exchange. The CNC will also vet labour costs, determining the number of skilled workmen and engineers needed to build the Rafale and multiplying that with the respective labour costs (notoriously high in France). The aim will be to demonstrate to the Dassault negotiators that the Rafale can be built cheaper than the price they have quoted.

CNC negotiations will also centre on the technologies that Dassault (and its sub-vendors, like Thales) will transfer to India and the modalities for doing so. The RfP mandates that the technology for the AESA radar (which Thales builds) is to be transferred to India. The CNC will verify how that technology, and others, would actually be transferred. Offsets are another minefield that Dassault must cross, ploughing back into Indian industry at least 50% of the estimated $15-17 billion contract value of this deal. Only after these issues are resolved will a contract be actually signed. Senior IAF officers believe this could take till late-2012.

* * * *

Even as the Rafale drama unfolded, India’s love affair with French fighters has continued. Around 2005, India bought ten Mirage 2000s, taking up the fleet to three squadrons. Negotiations were under way for buying 40 Mirage 2000-5 fighters from the UAE, but that stalled on the issue of price. Last year, the IAF signed a $2.4 billion deal to upgrade the Mirage 2000 fleet, extending its service life by at least another 15 years. And now, if the Rafale purchase goes through, the French seem here to stay.

Army Chief in the Supreme Court (the building pictured here). The battle with the Defence Ministry will be rejoined today. Broadsword brings you updates

Am heading off in a couple of hours to the Supreme Court. Today the government will file its response to the choice that the Supreme Court gave it exactly a week ago: the Honourable Justices observed that the Defence Minister's rejection (on 30th December 2011) of General VK Singh's petition for his date of birth to be recognised as 10th May 1951 appears to be bad in law, since it was based on the Attorney General's legal advice. That advice had "vitiated" Mr Antony's ruling, because the army chief was petitioning again an earlier MoD rejection (on 22nd July 2011) of his birth date request that had also been based on legal advice given by the Attorney General.

This, the judges observed, appeared to be procedurally incorrect because the Attorney General was allowed to influence the ruling on a petition that was directed against a ruling that had been based on his legal advice. This was a conflict of interest.

And so the Supreme Court had given the government a week to decide whether to withdraw Mr Antony's ruling and go back to the 22nd July 2011 position.

According to inside reports, the government has decided to back Mr Antony's rejection of 30th December. And so, the Supreme Court will probably decided today to hear the case and call for a written response from the government.

Wednesday, 8 February 2012

UK Minister for International Security Strategy, Gerald Howarth, with his Indian counterpart, Minister of State for Defence, MM Pallam Raju, at their meeting in New Delhi on Monday

by Ajai Shukla

Business Standard, 9th Feb 2012

Gerald Howarth, the UK’s Minister for International Security Strategy, who comes to India days after French company, Dassault, emerged the lowest bidder in the $15-20 billion Indian medium fighter competition, tells Business Standard that “disappointed” Eurofighter will put in a fresh bid that will be a “winning financial proposal.”

Q. The British media has slammed India’s choice of the French Rafale over the Eurofighter Typhoon. Does London feel hard done by?

We would be less than human if we were not disappointed. We believe the Typhoon is the best aircraft, which has already in service with six countries. No overseas customer has bought the Rafale so far.

I understand that Rafale was L-1 (the lowest bidder) only on price (sic). If the decision turned only on price, Cassidian (the military arm of EADS) will put in a revised price offer. The four nations (UK, Germany, Italy and Spain) can produce a winning financial proposal and I fully expect that Cassidian will be doing that.

Q. Would this happen soon?

The details of the fresh price proposal are being developed as we speak, and a final decision will soon be taken.

Q. Have you asked New Delhi for permission to bid afresh?

As our Prime Minister said in the House of Commons last week, we shall continue to present the case for the Typhoon. We believe that getting the best value for money would be in the best interests of the Government of India. But it is not for us to suggest what New Delhi should do. (Note: Asked whether a fresh Cassidian bid would be accepted, the Ministry of Defence declined to comment)

Q. The French president says that British defence manufacturing is dead?

It is interesting that he should say that when we have exported the Typhoon to two countries already, Saudi Arabia and Austria. Now Oman has issued a RfP (enquiry) and we believe they will soon purchase the Typhoon. But France has been unable to persuade anybody to buy their aircraft, which we believe was rejected here two years ago.

The UK is the second largest defence exporter, has a vibrant aerospace industry, and a world-class automotive industry. So the (French) president’s remarks were inaccurate. We know he is pretty desperate given his elections this spring. We think his statement is an example of Gallic hyperbole.

Had India selected the Typhoon as L-1, it would have had a favourable impact on the defence industry in the UK, Germany, Italy and Spain. But we are already working on substantial overseas orders. Typhoon is a continuing programme, whereas the French have slowed down production since their only customer was the French Air Force.

Q. But buyers all across Europe are cutting down on defence purchases… including the Typhoon.

The Eurofighter partners are all contractually bound (to buy the Typhoon), but we are all reviewing our positions in the light of the economic circumstances and the crisis in the Eurozone.

Q. So are jobs in the UK at stake here?

Not immediately, no! We have a pretty full order book currently. But we always welcome new business. It is also fair to say that the four nations also see this as an opportunity for a strategic partnership with India. And… (by buying the Typhoon) at a stroke, you would have access to the supply chain of four countries, not one.

Q. Other than the Hawk, the UK has not had many recent successes in India.

That is precisely what our trade mission is about. In fact, our relationship goes well beyond the Hawk. The Agusta Westland AW101 helicopter is being built in the UK (for the IAF’s VIP squadron). Substantial parts of the M777 ultra-light howitzer, including the titanium, high-technology components, are made in Barrow, in the UK. A smaller company, Sonardyne, supplies India with sonar surveillance equipment. And Cobham has been in India for long, supplying aircraft weapons carriage equipment and communications equipment.

Q. What is the purpose of your visit with this large British delegation?

We have three objectives. Firstly, to show India’s corporate sector the range and depth of experience in British defence and security industry; secondly, to identify the evolving Indian market; and, thirdly, to form enduring partnership with Indian companies.

Tuesday, 7 February 2012

The Rafale does not meet India's requirement for a light fighter. It is time to commit the money, manpower and planning resources needed for making the Tejas (pictured here) a success

by Ajai Shukla

Business Standard, 7th Feb 12

Kudos to the government for selecting a fighter aircraft for a depleted Indian Air Force, which currently fields barely 34 fighter squadrons (21 aircraft per squadron) against an assessed requirement of 45. While zeroing in on the French Rafale, New Delhi has said “no thanks” to arms supply heavyweights whose political and technological clout often bludgeons procurement decisions in their favour. This was helped, admittedly, by India’s ability to soothe the losers with alternative largesse --- Washington with contracts for transport and maritime aircraft; Moscow with deals for helicopters, fighters and warships; London with trainer jets; and Stockholm with the hope of mammoth deals for artillery guns and conventional submarines. But that should not detract from the IAF’s credit for running a fair, transparent and relatively quick contest in which, for the first time in India, a detailed “life cycle” evaluation looked beyond the fighter’s ticker price at the cost of operating it through a service life of four decades.

The difficulty in conducting such an exercise is illustrated in Brazil, where competing pulls and pressures have stymied a simpler decision between the Boeing F/A-18, the Rafale and the Gripen NG fighters.

India’s decision stemmed from Defence Minister AK Antony’s insistence on letting the IAF determine which aircraft best met its needs. But, sadly, this unwise reliance on the views of fighter pilots alone has twisted the rationale for buying a fighter. Instead of the cheap, single-engine, light fighter that the IAF set out to buy in the 1990s to replace India’s ageing MiG-21 fleet, the IAF will have 126 heavy, twin-engine and enormously expensive Rafales.

These 6 squadrons of Rafales could go up to 9 squadrons through a follow-on order, say IAF planners. Add to those 12 squadrons of Sukhoi-30MKI, and another 12 squadrons of the Fifth Generation Fighter Aircraft (FGFA) that India is co-developing with Russia, and the IAF will field 33 squadrons of heavy, high-performance fighters by 2022, i.e. 75% of its 45-squadron fighter fleet. This might gladden the heart of a young fighter pilot, just as a fleet of Ferraris would gladden the heart of a college-going youngster, even if his commute were two kilometres through crowded traffic. But it is worrisome to a defence planner who seeks a balanced force for performing a multitude of tasks economically.

Light fighters are affordable, and cheaper to buy and to fly. Being smaller, they are inherently more stealthy, or less observable on enemy radars. A top-class light fighter is one-third the cost of a Rafale. Even though the Rafale is a powerful, high-quality brute of a combat machine, it will almost always lose in a contest with three modern light fighters. “Quality is fine,” said Stalin, always the pragmatist; “But quantity has a quality of its own.”

That is why the USAF and the Israeli air forces have large fleets of single-engine F-16 fighters. That is also the logic for India’s MiG-21 fleet and for the Tejas Light Combat Aircraft (LCA) that will replace it. In the late 1990s, whilst justifying the procurement of fighters from abroad, the IAF cited delays in the Tejas programme and suggested that the Mirage-2000 production line be bought from Dassault, and the single-engine fighter be built in India. But when the MoD, still smarting from the Tehelka exposes, insisted on a multi-vendor global tender, the IAF reframed its requirements. The term became MMRCA (medium multi-role combat aircraft) and the specifications favoured a twin-engine, heavy fighter. Astonishingly nobody in the MoD seemed to notice the turnabout or object to the contradiction.

Today, India’s light fighter hangars are emptying fast with replacements lagging. By 2013-14, seven squadrons of Mig-21s must retire; another six squadrons will be phased out by 2017, as will four squadrons of MiG-27s. It is vital, therefore, to drive home the indigenous Tejas programme, committing the money, resources and organisational effort needed for developing and manufacturing at least 10-12 squadrons of progressively improved Tejas light fighters.

Compared to the estimated Rs 75,000 crore for just 126 Rafale, the Tejas’s budget has been a pittance. Since 1983, Rs 9,690 crore has gone into aerospace infrastructure --- R&D laboratories, defence factories, private industry, academic institutions, and a world-class test facility, the National Flight Testing Centre (NFTC) --- and into building and flight-testing some twenty Tejas prototypes. Rs 4,353 crore more are earmarked for the Tejas Mark II. Boosted allocations must now expand R&D facilities and up-skill the manpower that drives the Tejas programme.

Simultaneously, a world-class Tejas assembly facility must be built, incorporating the manufacturing practices and quality control measures that characterise aircraft production worldwide. Currently Tejas manufacture is the responsibility of Hindustan Aeronautics Ltd, which has been without a CEO since Ashok Nayak retired last October. With HAL’s focus on ongoing production lines like the Sukhoi-30MKI, Tejas assembly is hardly a priority. Nor is there emphasis on reducing manufacturing cost, which is currently too high at Rs 180-200 crore ($36-40 million) per Tejas Mark I. That must be brought down to Rs 125-150 crore ($25-30 million) to make the LCA a compelling buy on the international market. Export orders would allow scale manufacturing, driving down prices further.

Paying Rs 75,000 crore for the Rafale will indeed boost national defence. But a far smaller expenditure on the Indian aerospace establishment, and the squeezing of key technologies from Dassault and Thales during contract negotiations, will ensure that the Rafale is the last fighter that India buys abroad.

Friday, 3 February 2012

Just back from the Supreme Court. In 40 minutes of riveting legal drama in a courtroom packed to the rafters, Mr Justice Lodha and Mr Justice Gokhale demonstrated why India's higher judiciary is such a powerful force in this country.

Unmoved by a forceful performance from the government's legal stars --- Attorney General Goolam Vahanvati and Solicitor General Rohinton Nariman, who argued in tandem --- the Court has given the Defence Ministry a week to let the Supreme Court know whether the MoD would prefer that Mr Antony's decision on General VK Singh's petition be quashed, and the MoD would consider his statutory complaint afresh... or would the MoD prefer that the Court hears the chief's petition under Article 32 of the Constitution.

The Court made it clear that Antony's decision of 30th December 2011, rejecting the Army Chief's statutory complaint, violated the principles of natural justice. Antony's rejection was based on the Attorney General's legal opinion; that same Attorney General had also provided opinion that informed the MoD's earlier rejection (on July 2011) of the chief's request for his date of birth to be recognised as 1951, not 1950. The court's legal question was: How could the Attorney General provide the legal backstop for Antony's 30th December decision, when it was the same Attorney General's legal opinion that was being questioning in Gen Singh's statutory complaint? There was a clear conflict of interest here, observed the Court.

The Court also opposed the government's argument that the case should go to the Armed Forces Tribunal. When the chief has just four months of service left, the Court asked, why delay? And any appeal against the AFT's decision would come up before the Supreme Court again, the judges observed.

Scoreline at the end of Day 1: Vijay Kumar Singh --- 1; Union of India --- 0

A quick look ahead at the action in the Supreme Court this morning. The fighters... their cornermen... and the possible outcomes today

By Ajai ShuklaNew Delhi

Vijay Kumar Singh vs Union of India: Writ petition No. 126/2012

Filed by the army chief, General VK Singh, the writ petitions that his date of birth be recognised as 10th May 1951, in consonance with the records of the army’s Adjutant General’s Branch. The defence ministry maintains that his birth date is 10th May 1950, which another army branch, the Military Secretary’s Branch, maintained for 36 years. The defence minister has rejected Gen Singh’s petition, making him liable to retire on 31st May 2012. If the Supreme Court rules in favour of the chief, he will be eligible to serve till 31st March 2013, another 10 months.

Gen VK Singh: Uday Lalit and Puneet Bali. Ram Jethmalani has expressed interest in assisting General VK Singh pro bono (i.e. without renumeration), and he has received three detailed briefings last week from the chief's legal advisors. He is likely to be in the chief's corner today

Union of India: Attorney General Goolam Vahanvati; and Solicitor General Rohinton Nariman

On the court’s agenda

The judges would have already gone through the writ petition, filed on 16th Jan 12. Today they will hear arguments from both sides, and then rule on whether to admit the petition.

The writ is based entirely on documents and asks the court to “call for the record”, i.e. order the government to produce documents from which verification can be done.

Possible outcomes in court

Outcome 1: The bench dismisses the petition, which is the worst outcome for the army chief. While the government’s legal team would press hard for this, the chief’s lawyers believe that the writ is compelling.

Outcome 2: The bench refers the petition to the Armed Forces Tribunal (AFT), the apex court for military litigation. This would be the government’s second option, if it cannot get the writ dismissed outright.

Gen VK Singh’s legal team will counter that the AFT has a conflict of interest, since the chief heads the AFT and the MoD appoints the judges. If the bench insists on referral to the AFT, the chief’s legal team will plead for a fast-track AFT judgement.

Outcome 3: The bench rules that a fresh petition be filed in the Delhi High Court. This outcome would be unfavourable to the chief since, based on the current position, he will retire on 31st May 2012.

Outcome 4: The bench admits the petition and issues Notice to the Union of India to file a reply to the writ. The government, keeping in mind the chief’s 31st May retirement, would seek more time to reply. The chief’s legal team will argue for no more than two weeks. If the court accepts that, a verdict is possible in 4-6 weeks.

Outcome 5: The bench admits the petition, but allows the government a prolonged period to file its reply. In that case, the chief would retire on 31st May and continue the case as a civilian. If he wins before 30th March 2013, the government would face the tricky issue of reinstating him as army chief.

Outcome 6: The two-judge bench may not agree on how to deal with the writ petition. In the case of a dissenting opinion, a third judge would be appointed, whose opinion would decide the disposal of the writ.

Outcome 7: The two-judge bench could opine that the writ raises an important point of law, or public issue, and refers it to a larger bench, e.g. a Constitution Bench. In that case, Gen Singh may retire before a verdict.

Wednesday, 1 February 2012

It seems the MMRCA contract was just too big, and the investment made by Eurofighter GmbH just too large, for them to go down without a fight. It seems clear from the statement (posted below) issued last evening by Cassidian, the defence & aerospace arm of EADS, that they will question the IAF calculations that conclude that Rafale's was the cheaper bid. Read between the lines...

India's Decision on the MMRCA Tender

· India took the decision to select our competitor as the preferred bidder in the Medium Multi-Role Combat Aircraft (MMRCA) tender. Although this is not yet a contract signature and contract negotiations are still ahead, we are disappointed. However, we respect the decision of the Indian MoD.

· With the Eurofighter Typhoon, we offered the Indian Air Force the most modern combat aircraft available.

· Based on the Indian Government feedback, we will now carefully analyze and evaluate this situation together with our European Partner Companies and their respective Governments.

While final negotiations between Dassault and the MoD are still to take place, it appears that the size of mega deal could be above Rs 75,000 crore

by Ajai ShuklaBusiness Standard, 1st Feb 12

The Rafale fighter aircraft built by France’s Dassault Aviation has emerged the lowest bidder in the contest to sell the Indian Air Force (IAF) 126 medium multi-role combat aircraft. According to sources in the defence ministry, the Rafale has emerged marginally cheaper than its rival fighter, the Typhoon, fielded by a four-nation consortium, Eurofighter.

In reaching this conclusion, the IAF has calculated the Rafale would be cheaper than the Typhoon to buy, manufacture and fly over its entire four-decade service life. No prices have been made available, but MoD sources say the Rafale would cost some Rs 25 crore less than the Typhoon apiece.

The ministry did not respond to phone calls, an email and an SMS request for official confirmation.

However, Dassault sources confirm the ministry has informed the company that it has emerged the lowest bidder. Dassault remains unwilling to share details of its winning bid. A ministry committee, the Contract Negotiation Committee or CNC, will now engage with Dassault to hammer down the price before signing a contract.

The ministry had initially budgeted Rs 42,000 crore as the total cost of the 126-fighter contract. Ministry sources say India will, in fact, pay substantially more than that. The final deal size is subject to negotiations, and could go up to Rs 75,000 crore.

Dassault will be required to supply 18 “made-in-France” Rafales in three-four years. After that, manufacturing will progressively shift to Hindustan Aeronautics Ltd, Bangalore, which will build a new manufacturing line for the Rafale.

The Indian contract is a lifeline to the beleaguered French company, which has so far failed to sell a single Rafale fighter abroad.

The French air force and navy have cut down their initially projected requirement of 336 fighters; so far, they have ordered just 180 Rafales. In a TV interview last month, France’s Defence Minister, Gerard Longuet, declared the Rafale production line would shut down if no foreign orders were forthcoming.

India will be the foreign buyer that resuscitates that production line. Muammar Gaddafi’s Libya had declared its interest in buying Rafales, but was overtaken by history. Ironically, the Rafale flew sorties against Gaddafi’s militia during the Libyan civil war last year. Brazil was earlier on the verge of ordering 36 Rafales, but new Brazilian president Dilma Rousseff does not share the pro-Dassault enthusiasm of her predecessor Luiz Inacio de Silva.

The Rafale will eventually equip six squadrons of the IAF, each authorised 21 fighters. It is a delta-wing fighter with canards, which make it highly manoeuvrable and also allow it to land at speeds as low as 200 kmph. This makes it suitable for aircraft carrier operations, a key advantage over the Typhoon.

The fighter needs just 1,300-1,400 feet of runway to get airborne, an advantage in operating from air bases close to the border. Two Snecma M88 engines power the Rafale, allowing it to “supercruise” or fly at supersonic speeds without using afterburners. A key system is the Thales Active Electronically Scanned Array (AESA) radar, which is still under development. The Indian contract demands transfer of technology for the AESA radar.

The order of 126 Rafales caters only to the IAF’s requirement. The Indian Navy, too, has expressed interest in the Rafale (amongst several other fighters) for its aircraft carrier fleet. While the INS Vikramaditya (formerly, the Russian Gorshkov) will deploy MiG-29K fighters, the under-construction Indigenous Aircraft Carrier, with another vessel to follow, will also require carrier-borne fighters. A naval version of the indigenous Tejas Light Combat Aircraft (LCA) is close to flying. However, there is likely to be an additional requirement for heavy fighters like the Rafale for the naval fleet. Experts have forecast India would eventually acquire about 200 medium multi-role combat aircraft.

The IAF evaluated six fighters for this massive contract -- Boeing’s F/A-18 Super Hornet; Lockheed Martin’s F-16IN Super Viper; the Russian MiG-35; the Swedish Gripen NG; the Rafale and the Typhoon. After flight trials in 2010 and early 2011, the Rafale and the Typhoon were shortlisted in April 2011. Commercial bids from Dassault Aviation and Eurofighter GmbH were opened in November 2011. The IAF’s evaluation and selection processes have won widespread acclaim from aviation watchers worldwide.